“Coming out of the pandemic, the other four banks are in a very strong position to make acquisitions, too,” Robert Wessel, managing partner of Hamilton ETFs, told Wealth Professional.
“It’s not likely that you’ll see acquisitions of the size that you saw with TD and BMO, but it’s certainly possible that they could do something smaller. I wouldn’t rule out the large acquisitions, but there’s nothing obvious for the other four banks to buy. The acquisitions that we saw with BMO and TD ere the biggest and second biggest in Canada’s history.”
Wessel said the moves were a result of some unique circumstances due to the pandemic, which resulted in very significant growth in capital that the banks weren’t allowed to do anything with.
“Capital kept building, building, and building for most of a two-year period,” he said. “So, this facilitated these two acquisitions, which were quite large. It gave them enough financial strength.”
Wessel said the acquisitions offer several benefits, including adding scale and providing the banks with a highly complementary geography as they penetrate more of the American market.
